Central Asia Consumer Confidence in October 2024: Mixed Trends with Structural Shifts

Photo by: © The Press Service of the President of the Kyrgyz Republic / Sultan Dosaliev

For the sixteenth month, Freedom Finance Global has been researching consumer confidence, inflation and devaluation expectations of residents of four Central Asian countries: Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. In October 2024, the dynamics of consumer confidence are ambiguous. Growth occurred in only two countries, and the changes were mostly quite significant. However, the dynamics of inflationary sentiments have improved noticeably in almost all countries, although a couple of countries are still far from recovery. On the other hand, devaluation expectations in the region have grown almost everywhere amid weakening national currencies, The Caspian Post reports citing foreign media.

In October, the Consumer Confidence Index (CCI) improved in two Central Asian countries. Kazakhstan demonstrated growth for the second month in a row and the best result in 2024. In Uzbekistan, the growth rate accelerated after the September decline, and the index turned out to be the highest since March of this year. On the other hand, Kyrgyzstan demonstrated a decline in the index for the second month in a row after its recent rapid growth, and it turned out to be much more significant. In Tajikistan, the decline was small, but at the same time, residents’ opinions have changed dramatically on certain issues over the past month.

In Kazakhstan and Uzbekistan, analysts collect 3,600 questionnaires each month, 1,600 in Kyrgyzstan and 1,200 in Tajikistan, pro rata the size of the population in the countries under research. The research is based on the methodology used to obtain consumer confidence indexes in many countries around the world and adapted to local needs by the United Research Technologies Group company. Data collection method: telephone survey. The survey questionnaire is localized: the research is conducted in the native language of the respondents.

Kazakhstan

In Kazakhstan, the Consumer Confidence Index demonstrated growth for the second month in a row in October and reached 104.5 points, which was the best indicator in 2024. The improvement in respondents’ sentiments occurred in four out of five sub-indexes. The largest increase occurred in forecasts of changes in personal financial situation over a one-year horizon. Compared to last October, the CCI increased by 1.2 points, largely due to a significant improvement in estimates of changes in the economic situation.

Improving personal financial situation forecasts

The sub-index of the forecast of changes in personal financial situation over the next 12 months increased by 3.4 points and reached 132.5 points, which is the best result of 2024. The share of those who believe that their personal financial situation will improve increased from 48.1% in September to 50% in October.

Among the age groups, however, the growth of optimism is not occurring in all groups. The strongest growth is recorded in the 45-59-year-old group, where the share of positively minded respondents increased from 39.6 to 45.1%. Nevertheless, the best result is still shown by young people under the age of 29, among whom the same share increased from 63.4 to 67.1%. While, among the older generation from 60 years old, on the contrary, an increase in pessimism is recorded: only 31.1% of people chose positive answers against 35.2% in September.

In the regional context, the greatest increase in positivity in forecasts of changes in personal financial situation is observed in Akmola and West Kazakhstan regions, where the share of positive responses increased by 13.7 and 13.5 p.p., respectively. Nevertheless, the Kyzylorda region continues to be the leader, where the share of those predicting an improvement in personal financial situation in the next 12 months was 61.6%. The worst response was in the Ulytau region, where this indicator, on the contrary, fell from 46 to 23.3%.

Strongest optimism in the economy over the past year

Compared to September, the sub-index of estimating changes in the economy also showed a noticeable improvement growing by exactly 3 points and amounting to 82.6 points. This result is the highest since November 2023. The share of Kazakhstanis who believe that favorable changes have occurred in the economy increased from 17.4 to 18.7%. However, the decrease in the share of negative responses is more noticeable: from 42.4 to 39.6%.

Among the age groups, the greatest increase in optimism was demonstrated by young people under the age of 29. The share of positive responses increased from 19.6 to 23% among their representatives. It was the best result among age groups. At the same time, the changes were insignificant in other age groups. The worst responses were given by respondents aged 45–59, among whom only 16.7% noticed an improvement in the economy over the past year. However, the result for the 30–44 age group was slightly higher (16.9%).

In the regional context, the greatest progress was shown by the Zhambyl region, where the share of positive responses increased from 15.5 to 28.1%. This result was also the best among all regions in October. A large monthly increase was also recorded in Almaty and West Kazakhstan regions, where the same indicator increased by 7.1 p.p. On the other hand, respondents from the Ulytau region responded the worst, where the share of positive responses fell from 13.8 to 9.3% over the month.

Inflation estimates have fallen to lows

Inflation estimates of Kazakhstan residents fell again in October after a noticeable increase in September. Over the past month, 37.5% of respondents (39.7% in September) indicated a strong increase in prices. Over the past year horizon, there was an even more significant drop in the share of those who noticed a rapid increase in prices: from 50.8% in September to 47.5% at the time of the last data collection. It should be noted that both indicators turned out to be a record minimum for the entire research.

However, the inflation expectations of Kazakhstanis, on the contrary, showed growth compared to September and updated the highest values this year. The share of people expecting a strong increase in prices in the one-month horizon increased from 19.9 to 21.9%, while in the next 12-month horizon, the share of those expecting an acceleration in price growth increased from 24.9% in September to 25.4% at the time of the last survey.

A similar survey of inflation estimates and expectations by the National Bank of Kazakhstan also demonstrated a decrease in inflationary pessimism updating multi-month lows. According to the presented data, the share of those expecting strong price growth during the year fell from 24.3% to 19.9%. While in the one-month horizon, the same indicator fell from 19.5% to 18.1%. Inflationary estimates also demonstrated a significant decline. While the share of respondents noticing price growth over the past month has decreased from 29 to 27.9%, the share of those indicating rapid price growth over the previous 12 months has decreased from 42.7 to 39.4%, which is the lowest value since January 2019.

Among certain goods and services, most respondents are still concerned about the significant increase in food prices. The list of the top 4 goods, whose prices have most noticeably increased for the population, has remained unchanged over the past year. It includes the categories ‘Meat and Poultry’, ‘Milk and Dairy Products’, ‘Bread and Bakery Products,’ and “Vegetables and Fruits”. Despite the decrease in inflation estimates, on average, the share of people who noticed a strong increase in prices for all of the above products increased by 2.2 p.p. compared to September. For meat and poultry, the share indicator increased from 36.1 to 40.2%, which was the third result this year. The share of people who chose fruits and vegetables also increased significantly (+3.5 p.p.), which is due to the end of the seasonal price reduction. According to official statistics, prices for meat and poultry increased in October by only 0.2% MoM. Fruits and vegetables fell in price by 0.3% compared to September, although certain items (cucumbers, tomatoes, citrus fruits) rose by 7–10% MoM.

Devaluation expectations hit new records

Devaluation expectations of Kazakhstanis increased significantly in October and reached new record values for the entire research amid an increase in the US dollar exchange rate to 496 tenge at the moment. According to the survey, the share of Kazakhstanis expecting the tenge to weaken over a one-year horizon increased from 57.5 to 59.3%. Over a one-month horizon, there was an increase from 35.2 to 40.5%. We would like to note that the share of pessimists increased by 5.4 p.p. for the first question and by 6.1 p.p. for the second question compared to October 2023.

Uzbekistan

The Consumer Confidence Index of Uzbekistan residents showed a good recovery in October 2024 after the September decline and increased from 128.7 to 132.5 points. Separately, the improvement occurred in all five sub-indexes that determine the index. The sub-index of changes in the economic situation showed the greatest growth. However, the CCI fell by 1.9 points compared to October 2023, largely due to a drop in optimism regarding the economic situation.

Opinions about the economic situation have greatly improved

In October, the sub-index of changes in the economic situation showed the greatest growth. It grew by 7.2 points and reached 126.7 points, which is the best result in the last seven months. Almost 55% of Uzbekistan respondents believe that the economic situation has improved over the previous year, which is 5 p.p. more than the September figure.

Noticeable positive dynamics are observed among all age groups. The greatest change was recorded among people aged 45–59, 56.8% of whom believe that the economic situation has improved, while such respondents accounted for 50.1% in September. The best result continues to be shown by the older generation from 60 years old, where this share reached 57.5%. Young people under the age of 29 are in the last positions, where the indicator increased from 46.9 to 53.1% in October.

In the regional context, the most noticeable improvement (compared to September) is recorded in the Jizzakh, Bukhara and Samarkand regions, where the share of positive responses increased by 15.6, 11.6 and 8.9 p.p., respectively. At the same time, the other regions do not show any significant changes. Nevertheless, the Khorezm region continues to be the leader with a share of positive responses of 64.2%. While the outsider also did not change, and it is still Tashkent, where the same indicator increased by only 0.1 p.p. and amounted to 37%.

More optimism about personal financial situation

Another sub-index that grew significantly in October was the change in personal financial situation over the past year. The previous level increased by 4.2 points, and the indicator also demonstrated the best result in seven months. Over 62% of Uzbekistan residents chose the positive answer, while there were 57.7% in September.

Among the age groups, young people under the age of 29 demonstrated the best estimates. If the share of positive answers in this group reached 67.4% in the previous month, then it grew to 73% in October, which is the highest result among all surveyed categories. Respondents over 60 years old still demonstrated the worst result; there were 49.1% optimists among them, which is 2.4 p.p. higher than in September. The dynamics of the other two age groups turned out to be average. The share increased by 4.7 p.p. among people aged 30–44, and by 3.8 p.p. among residents aged 45–59.

In the regional context, the greatest improvement in the indicator occurred in the Bukhara region. The share of respondents who chose positive answers increased from 60.8 to 70.1% there. It was the best regional result. The share also increased by a noticeable 8.6 p.p. in the Fergana region. Only the Surkhandarya region showed negative dynamics in October, where the share of positive answers fell from 62.1 to 57.9%. Yet, Tashkent continues to be an outsider in this matter with an indicator of 54.1%.

Inflation expectations and estimates declined along with official inflation

Inflation estimates and expectations of Uzbekistan residents showed a general decline in October. Thus, in October, 48.6% of residents felt a very strong increase in prices over the past year against 51.4% in September. However, over the past month, their share fell from 31.8 to 29.9%.

At the same time, inflation expectations showed a slight improvement compared to September. The share of those expecting a strong price increase in the next month fell from 19.6 to 18.8%. In the one-year horizon, 24.2% of respondents expect faster price growth, which is 1.4 p.p. lower than the September figure and is generally the lowest value for the entire research.

According to official statistics, a monthly price increase of 0.84% was recorded in October. Amid the above, annual inflation has noticeably decreased from 10.46 to 10.24%. We noted the slowdown in the monthly growth of meat prices. The growth rate has fallen to about 1% after figures of 3 and 5 times higher in September and August, respectively. Nevertheless, this continues to have a noticeable impact on the sentiments of respondents. Over 60% of respondents indicated meat and poultry as a product for which a strong price increase is noticeable, while there were 61.9% in September. We noted a slight decrease in this indicator for housing services and utilities (-3.3 p.p.) and flour (-2.6 p.p.). Flour showed the lowest result for the entire research, although it was in second place a year ago. It should be noted that, according to official statistics, housing services and utilities increased in price by only 0.3% MoM in October, while the price of flour has decreased by 2.6% over the past year. Moreover, a small monthly increase in the price of vegetables and fruits did not affect the sentiments of respondents.

Continued growth of devaluation expectations

In September, devaluation expectations of Uzbekistan residents continued to grow after a sharp increase in September. The Uzbek sum showed a weakening of 0.6% for the third month in a row in October. The share of those who expect the national currency to weaken against the US dollar over the next 12 months increased from 59.4% in September to 60.5% in October. However, in the one-month horizon, the share of pessimists increased from 41.2 to 42.7%. These figures have become the highest in the last 5 months, but they are still below the levels of October 2023.

Kyrgyzstan

In Kyrgyzstan, the Consumer Confidence Index showed a decline in October for the second month in a row. The index (CCI) fell by 3.6 points in a month and reached 137.2 points. This time, all five sub-indexes that determine the index composite level showed a decline. The largest decline is recorded in the matter of estimating changes in the economic situation over the past 12 months. However, the index grew by 8 points compared to October 2023 after a strong improvement in the first half of 2024.

Estimates of the economic situation have worsened

The sub-index of estimates of changes in the economic situation over the past 12 months showed the largest monthly decline. It is worth noting that this sub-index was the main driver of the recent strong growth in consumer confidence. It fell by 7.2 points in October. More than 67% of residents indicated an improvement in the economic situation, while this figure reached 71.7% in September.

Among the age groups, the decline is observed across the entire spectrum, but the deterioration was formal among the older generation. Over 72% of the country’s residents over 60 years old noted an improvement in the economic situation, while there were only 0.1 p.p. more of them in September. This result became the best in October. However, respondents aged 45–59 were at the end of the list, the share of positive answers fell sharply from 74.3 to 64.3% among them. The decline in the other two age groups was small and amounted to 2.3–3.1 p.p.

In the regional context, there is also a multidirectional dynamics in improving estimates of changes in the economic situation. The leader of October and the one that showed the greatest increase in the share of positive responses was the Talas region, where the indicator increased from 69.7 to 80.5%. This region took over the leadership from the Batken region, where the same share fell by 9.3 p.p. The share also decreased significantly in Bishkek and the Naryn region by 10.7 and 10.5 p.p., respectively. Finally, residents of the capital responded the worst: only 50.7% of them noted positive changes in the economy.

Another reduction in estimates of favorable conditions for large purchases

The sub-index of current favorable conditions for large purchases has been falling for the third month in a row and has become lower by another 3.8 points compared to September, and reached a level of 103.8 points. Yet, it is still the highest value in Central Asia. The share of people indicating favorable conditions for large expenses increased from 43.5% in September to 44.4% in October. Nevertheless, the share of clearly positive responses decreased by 2.1 p.p., and the share of negative responses increased by 4.4 p.p.

All age groups showed an increase in pessimism, but it was most noticeable among respondents under 29. There, the share of people who consider the current conditions for large purchases as unfavorable increased from 29.4 to 36.3%. Nevertheless, it was the lowest value among all age groups. The largest share of pessimists was recorded among people aged 45–59, whose similar indicator increased from 36.1 to 40.5%.

It should also be noted that the increase in the share of negative responses is observed in all regions of the country. The strongest growth is observed in the city of Osh, where the share of negative responses increased by 14.3 p.p. However, residents of the Talas region gave the worst responses, a share of those who noted unfavorable conditions for large purchases was 46.6%. While, this indicator turned out to be the best in the Naryn region and amounted to only 27.5%, despite an increase in the share of pessimists by 10.5 p.p.